Bergoglio sold off Buenos Aires church bank shares

Published: 05 April 2013

A former top aide to Pope Francis said yesterday that a little-known aspect of his record as the archbishop of Buenos Aires lends credence to speculation that sooner or later, he may shut down the Vatican Bank.

On Tuesday, the Reuters news agency quoted two Vatican officials anonymously who said that closing the bank, formally known as the “Institute for the Works of Religion,” is an option Francis might consider.

Yesterday Federico Wals, a layman who served as the future pope’s spokesperson in Buenos Aires since 2007, told NCR he believes that may well be the case.

“I think he’ll move everything to the Bank of Italy, or something like that,” Wals told NCR, citing as a precedent a key decision made by then-Cardinal Jorge Mario Bergoglio when he arrived in Buenos Aires in the late 1990s.

During his span as archbishop Bergoglio didn’t maintain a high media profile, so his approach to internal administration isn’t widely known outside local church circles. Wals, however, discussed Bergoglio’s management philosophy with NCR during an interview in his office at archdiocese headquarters.

According to Wals, when Bergoglio took over the archdiocese was essentially broke. One reason, he said, was that the church was a partial owner of several local banks, so it could borrow on highly favorable terms – a situation, he said, that didn’t encourage fiscal discipline.

“We had the same issues as the Vatican Bank is facing today,” Wals said. “It was a black hole, so there were basically no limits on what we could spend.”

Wals said that Bergoglio swiftly took personal responsibility for the financial mess. The key move, according to Wals, was that Bergoglio decided to sell off the archdiocese’s bank shares and to transfer its funds to international banks such as HSBC and UBS, “as a normal client” rather than a partial owner.

That step, Wals suggested, not only imposed greater restraint on borrowing and spending, but it also spared the church the potential embarrassment of being linked as an owner to banking scandals.